U.S. Geothermal Energy Growth

by Leslie Blodgett, Geothermal Energy Association

“Geothermal grows 26% in 2009,” read headlines following release of the April “U.S. Geothermal Power Production and Development Update,” in which the Geothermal Energy Association (GEA) surveyed U.S. geothermal energy developers.

With seven new geothermal plants online in the U.S., power capacity rose 6 percent in 2009 and saw 26 percent growth in new projects under development. As 2010 unfolds, the number of states with geothermal power will reach double digits.

Geothermal projects could bring the nation 7,000 MW of new baseload geothermal power in the next few years. At that level, geothermal power will satisfy the needs of more than 10 million people and still have tremendous growth potential in the United States.

The U.S. Department of Energy (DOE) is expected to officially recognize a near-term potential of at least 20 GW, which could cover 5 percent of all U.S. power needs. Longer-term possibilities are expected to be more than 100 GW.

As advancements in new geothermal technologies expand the recognized power potential of geothermal resources, the energy source is available in more places than before. The update identified 188 projects underway in 15 states. When completed, these projects will add more than 7,000 MW of baseload power capacity; enough to provide electricity for 7.6 million people.

The U.S. in the Global Geothermal Scene

The U.S. continues to lead other nations in online geothermal energy capacity and is one of the principal countries with increased geothermal growth.

Private companies and government agencies have increased their global geothermal activities. Power generation demand and global fuel price increases drive commitment to alternative energy sources in developing regions. The benefits of geothermal projects can preserve the cleanliness of developing countries seeking energy and economic independence, and it can provide a local source of electricity in remote locations, thus raising the quality of life.

Aside from the U.S., most global geothermal generation capacity is concentrated in a few countries such as the Philippines, Indonesia, Mexico, Iceland and New Zealand. Most of the continuing geothermal growth will occur in these established markets in the short term, but healthy developments also are expected in Chile, Argentina, Turkey, Russia, Central America and East Africa.

U.S. delegates had the opportunity to meet this year at the World Geothermal Congress, held every five years. This year the world’s largest meeting of ministers, dignitaries, experts and academicians was April 25-30 in Bali, Indonesia. Preliminary reports announced 80 countries participating, with 800 presentations having highlighted the latest developments in worldwide geothermal energy utilization.

Representatives from the U.S. also are involved in the International Partnership for Geothermal Technology (IPGT) along with Australia and Iceland. The IPGT works to develop effective methods and practices to accelerate the development of geothermal technology through international cooperation.

Policies Critical to Continued Industry Growth

The American Recovery and Reinvestment Act of 2009 (ARRA) included several provisions supporting expanded geothermal power in the U.S.

The ARRA extended the full production tax credit (PTC) to all geothermal power projects coming online by the end of 2013.

It made qualified facilities eligible for the 30 percent investment tax credit instead of the PTC and created a Treasury tax grant program that made taxpayers eligible for the investment tax credit to receive a cash grant in lieu of the credit.

The ARRA also established a loan guarantee program for commercial renewable energy projects at the DOE, creating a new Section 1705 to complement the DOE’s Innovative Technology Loan Guarantee Program, originally authorized in the Energy Policy Act of 2005.

The new amendment temporarily directs the secretary of energy to use the $6 billion in appropriated funds to make guarantees under the loan guarantee program for projects commencing construction before Sept. 30, 2011, in qualifying categories. For the first time, the DOE opened its loan program for commercial geothermal technologies.

In project funding, the ARRA directed $400 million for research, development and deployment of geothermal technologies through the DOE geothermal program.

The direct funding from the DOE has resulted in awards of $338 million for 123 projects in 39 states to explore and develop new geothermal fields and research into advanced geothermal technologies.

Recipients include private industry, academic institutions, tribal entities, local governments and DOE national laboratories. When completed, these projects will represent a total of $691 million invested in new geothermal technology and applications.

Despite the recession, geothermal energy employers in 2009 added 750 full-time jobs and 2,827 construction-related jobs as a result of a roughly $800 million investment in the technology.

Renewable portfolio standards (RPSs) provide markets for renewable power. The two largest geothermal producers, California and Nevada, have set standards that positively affect the industry. California Gov. Arnold Schwarzenegger recently signed an executive order to increase California’s RPS to 33 percent by 2020. Nevada’s RPS, 25 percent by 2025, has been in place since 2005.

The U.S. Bureau of Land Management and Forest Service recently completed a “Final Programmatic Environmental Impact Statement for Geothermal Leasing in the Western United States,” which evaluates the environmental impacts of agency actions. The EIS implements congressional direction to the Energy Policy Act of 2005, proposes approximately 118 million acres of public lands and 79 million acres of national forest lands to be made available for potential geothermal leasing and is key to supporting new development.

As geothermal efforts move forward, climate change is expected to increase the pressure for policy support by federal and state governments, and geothermal power will become more widely viewed as one of the key energy sources to provide baseload power, now largely supplied by coal.

State-by-State Developments

GEA’s April report surmised, “In 2007 geothermal energy accounted for 4% of renewable energy-based electricity consumption in the United States. As of April 2010, geothermal electric power generation is occurring in nine U.S. states: Alaska, California, Hawaii, Idaho, Nevada, New Mexico, Oregon, Utah, and Wyoming. Other states, such as Colorado, Louisiana, Mississippi, and Texas are soon to be added to the list. The United States has a total installed capacity of 3,086.6 MW.”

Dan Jennejohn is a GEA research associate and author of the report.

“Stimulus funding will support geothermal development in states where geothermal technology presents vast new opportunities,” Jennejohn said. “In our survey last fall, we were concerned that the progress of new projects appeared to be stalling due to financing and permitting problems.

“Now, along with a number of new projects, we are seeing projects continue rapid development indicating that growth is returning across the industry.”

U.S. geothermal power plant operations began in 1960 when Pacific Gas and Electric Co. began operation at The Geysers field in northern California. The Geysers is now the largest system of geothermal plants in the world. As California celebrates 50 years of geothermal production, it is the state with the highest online capacity of geothermal power: approximately 2,565.5 MW.

In Nevada, three new geothermal plants came online in 2009, and several projects were in final stages of development. Nevada has 20 operating geothermal power plants and a total operating capacity of 433.4 MW. With suitable land and policies bringing in new developers faster than any other state, Nevada rapidly is increasing its recognition as a central player in the world’s geothermal operations. Projects in the state received some $73.6 million in DOE funding; more than any other state.

Approximately 255,355 acres of land in Nevada, California and Utah were dispersed for geothermal energy exploration at a 2009 Bureau of Land Management lease sale, generating total revenues of $9 million.

New Operations Confirm Upward Projections

Seven geothermal projects came online in 2009, adding some 176 MW of renewable energy capacity in five states. These included large-scale geothermal power plants:

1.  Enel North America completed construction of two Nevada geothermal projects for a combined total of 65 MW,
2.  Enel North America’s second project,
3.  Nevada Geothermal Power Inc. completed its 50-MW Blue Mountain Faulkner 1 power plant in September 2009,
4.  Ormat Technologies Inc.’s 50-MW North Brawley power plant in California became operational in 2009; and
5.  Raser Technologies Inc.’s 10-MW Thermo No. 1 or Hatch power plant in Utah went online April 2009.

Raser’s Thermo No. 1 plant was recognized as the Geothermal Power Plant of the Year at the annual Electric Power Conference. Brent M. Cook is CEO of Raser Technologies.

“We are honored to be recognized by the industry and our peers for our efforts and success in building an exemplary power plant,” Cook said in a statement. “We are continuing to develop our geothermal resources and thus expand the nation’s potential energy supply. This industry recognition validates our approach to delivering zero-emissions electricity.”

New Smaller Power Units Became Operational

6. The Oregon Institute of Technology began generating electricity with a 0.28-MW unit at its Klamath Falls campus in 2009, and
7. The Rocky Mountain Oil Testing Center installed and operated a 0.25-MW geothermal hydrocarbon co-production unit near Casper, Wyo., in 2009.

Direct-use applications and geothermal ground-source heat pumps have installations in nearly every U.S. state. The nation has seen utility-scale geothermal power operations in the western states because resources with higher temperatures are more accessible. But as technology advances varieties of proven and demonstrative models, the power to harness the earth’s heat continues to spread.

Author

Leslie Blodgett is a writer and editor for the Geothermal Energy Association in Washington, D.C., and previously edited publications of the American Geophysical Union. She graduated from Brigham Young University Hawai’i with a bachelor’s degree in liberal arts. Reach her at leslie@geo-energy.org.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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